For Merchant Seaman and Chief Officer Ramel Kidd, investing in Queensland property has been quite the learning curve.
“You haven’t really invested in property if you haven’t experienced a negative property situation,” he says – and he can confidently confirm he has experienced a number of them!
Ramel’s initial approach to property investing was one that ultimately led to a number of drawbacks.
“I once bought a property in Brisbane on the weight of being advertised as a three-bedroom ‘Townhouse’ in Kelvin Grove,” he explains.
“It ended up being a unit with two bedrooms and a mezzanine deck that was being used as a third [bedroom], in the suburb next door called Herston!”
Then there is his Gracemere home. Decades after immigrating from the Philippines, it was his desire to create a better life for himself and his family that prompted him to pick up the phone and make enquires after being “dazzled by newspaper articles… saying that Gracemere was booming.”
Before long, he too was investing in the central Queensland suburb.
“The build took longer than anticipated and the quality was below average. The suburb has dropped in price too,” he says.
“Another shocker when I bought that off the plan 3-bedder in Gracemere, Qld, was to do with the NRAS [National Rental Affordability Scheme] incentive from dodgy developers and finance broker combined. I paid $6,000 for a brokerage fee.”
He felt he’d been fleeced – not to mention stuck with a suite of properties that weren’t moving him forward.
Learning about loans – the hard way
It wasn’t just his properties that were causing Ramel concerns: it was also his trouble with the banks.
Learning how to properly utilise banks and property managers efficiently was a challenge he had to overcome, and required him to learn the necessary skills along the way.
“I made the mistake of putting one of my properties on a fixed interest [mortgage] and I tried to release some equity on another. The bank was going to charge me $25k to break the fix interest rate,” he explains.
He decided to nix that idea, and through that experience learnt how important it is to separate his loans from each other to become stand-alone mortgages.
“I am now slowly removing each property from being cross-collateralised. I used to be a one-bank-man, but now I use all banks as they are not always there to look after you,” he says.
Turning lemons into lemonade
Despite all of the issues and challenges that have arisen from his investing to date, Ramel is happy with his progress. He has certainly adopted the right attitude: that he will learn from his mistakes, and that he is in this for the long haul.
Through Ramel’s buy and hold strategy, many of his purchases were capable of being salvaged, particularly with the support of the NRAS tax incentive.
“Because I’m a buy and hold strategist, I can sit and wait on my investments.
I have been lucky that there hasn’t been any major setbacks and the properties are rolling along nicely now,” he says.
Having bought three established properties, each of which he has renovated, Ramel has been able to manufacture equity and keep his portfolio thriving. He has also enrolled in a mentoring program with Real Wealth Australia, which is helping to guide him towards better performing assets.
“I have a goal of obtaining at least 10 properties and I’m aiming for 14 within the next 6 years,” he says.
“My wife just bought a block by the coast on the Tweed Coast and we will build our dream home there in a couple of years. We can’t wait!”